Contrary to the conventional wisdom found in many companies, when it comes to sales productivity indicators, less is more. That is, just a few indicators are sufficient to evaluate the team’s performance. To manage sales requires focus, alertness and speed in decision making. There is not much time for extensive analysis.

All of us who work in sales know that, at the end of the day, what matters is whether or not we achieve our sales goals. This is the main indicator of sales performance.

I go overboard with the E words in my book, Sales Automation Done Right, (hey, that was written ten years ago, so no apologies). Then I used the simple example of the compounding effect of the building efficiency over effectiveness (E squared, if you are at all scientific.) You can find that discussion in the free e-book in our library. (Scroll down to the five SADR Extractions.) I finished up that discussion with the proposition that “Effectiveness on top of efﬁciency produces dramatic increases in sales. It’s the same as compound interest in the bank account.” But something tells me that that discussion is just a little too abstract.

Everyone has heard about meritocracy, a professional evaluation and compensation model based on achieved results, usually revenues. It has been successful model for years and it is used all over the world, moving companies and industries up in business. In most cases, meritocracy produces effective and positive results, however, in extreme cases, it has also caused negative side effects across sales teams.

In terms of managing people, I’ve read an article where experts say that in extreme cases of meritocracy, employees can experience increased stress. This stress will actually have the opposite effect of success, and will lower their drive to produce results, which will result in the failure to reach sales targets and goals. As business gets more competitive, maybe it’s time to think about the evolution of the means by which we obtain results through people. In particular – salespeople.

Ed. We’re welcoming back Jason Jordan of Vantage Point Performance with a second research-based article. This time, it’s sales management that gets examined, and they found some interesting information on how all of you sales managers spend your time, and offer some very cogent observations on how it might be better spent.

We often contend (and do believe) that the sales manager’s role is the most complex in any organization. They are part teacher, part coach, part salesperson, part CFO, part IT director, part marketing manager, part sales support, and perhaps parts of many other roles. Sales managers do a bunch of stuff. But what stuff matters the most?

If selling directly to end-users can be complex, how about selling through manufacturers or trading companies? The best way to understand this is to look at an example.

Let us assume your company manufactures optical inspection equipment. A French pharmaceutical manufacturer intends to extend their manufacturing plant and sends enquiries to three plant architects/engineers/construction companies (prime contractors), one each in France, Germany, and Switzerland. All three are asked to offer the design and construction of the complete facility including an automatic optical inspection system, your product. They send out requests for quotations to various equipment manufacturers, including your company. Since you have sales organizations (or reps) in all three countries, the enquiries go directly to the responsible sales persons and are followed up individually by of them, each without being aware of the other’s activities. What follows?

Most companies cannot serve all of their market through direct sales. At least outside their home territory, they have to engage intermediaries who can be agents, representatives or sister companies. Ideally, both sides share the same goals and work hard in order to win business in their mutual markets, and in most respects they probably do.

But there are differences that can lead to significant problems. While the principal and the agent both share the same interest with respect to getting orders, their economics work differently. Efficiency may not be viewed from the same angle.

On the principal’s side there can be substantial costs involved in preparing quotations. In the project business or for any customer-specific solutions such as custom machines, there may be a lot of engineering work involved for preparing a quotation. In some businesses this may involve many man-days of effort.

Ed. Today we introduce a new contributor to The HUB who may not be new to you – Lee Salz. Lee is the President of Sales Architects and you may know him from his web site, his popular Sales Management Minute blog and audiocast, or from experience with his consulting services. Lee’s article on sales management metrics has been excerpted below, and we encourage you to visit his site to read the entire article.